COA recommends suing COWD execs, contractors-A A +A
Wednesday, September 18, 2013
THE Commission on Audit (COA) has recommended the filing of appropriate charges against the board of directors of the Cagayan de Oro Water District (COWD) and two of its contractors for what state auditors alleged as violation of Republic Act (RA) 3019 or the anti-graft and corrupt practices law.
COA identified the two private firms as Rio Verde Consortium, Inc. (RVWCI) and Geo-Transport and Construction, Inc. (GTCI).
Rio Verde’s transaction with the COWD was for the bulk water supply project, and Geo-Transport for an improvement and expansion project.
The recommendation formed part of the COA final report, with series number 2013-002, released by COA last June 15 and obtained by this paper Tuesday.
The 50-page document was titled “Report on the results of the audit on alleged graft and corrupt practices of the Board of Directors together with the contractor, Rio Verde Water Consortium, Inc. of the Cagayan de Oro Water District, and the then LWUA Administrator.”
Aside from recommending of filing of charges against Rio Verde, COA also wants to “initiate annulment of the contracts which made a mockery of the bidding process through violation of the law and public policy” and “disallow the amount of (P47.96 million) representing unnecessary and irregular expenditures due to the transfer of the original take-off point to Carmen Reservoir and Canitoan Area, despite negative comments and observations of the COWD Engineering Department.”
In the contract between Geo-Transport and COWD, COA has also recommended filing of charges for violation of RA 3019 and for violation of RA 9148, the Government Procurement Reform Act, and its implementing rules and regulations.
The COA prohibits the following:
“1. Excess amount of (P14.72 million) representing the difference/variance between the contract cost and the COA evaluated cost;
2. The excess amount of (P14.48 million) for Phase 3 Improvement/Expansion Project-Lateral Improvement Project (P3IEP-LIP) Supplemental Agreement No. 2 representing overpayment to the contractor and
3. The amount of (P16.32 million) representing loss suffered by COWD when it agreed to GTCI’s computation on the price escalation which was higher than the COWD’s computation. File against the officials involved.”
This paper was informed that a person who goes by the name Juan de la Cruz has already filed charges against the COWD board and the two contracts at the office of Ombudsman in 2008.
In an interview with Sun.Star Cagayan de Oro Tuesday afternoon, Rachel Beja, COWD general manager, said the water utility has no hand in the legal processes that stemmed from the COA report.
Beja said that since COWD is a government-owned and controlled corporation, it is the office of the government corporate counsel (OGCC) that handles the COA-recommended charges.
Beja said the OGCC is still waiting for verification from COA on how to proceed with its recommendation to nullify the contract between Rio Verde and COWD.
“We are still waiting for advice from the OGCC,” Beja said.
She said it was the office of the Ombudsman who requested from the COA fraud audit committee to investigate the contract. In turn, the COA will endorse its report to the Ombudsman.
It can be recalled that COWD entered into a 25-year contract with Rio Verde for a bulk water supply project in which Rio Verde will provide COWD with an average of 40,000 cubic meter of potable water per day.
The deal, signed in 2004 but started in 2007, has obligated COWD to pay Rio Verde about P12 million per month for the bulk water supply.
After COA recommended the nullity of the Rio Verde-COWD contract last June this year, the COWD is still allegedly buying from Rio Verde per purchase order, it was learned.
COWD’s transaction with Geo-Transport was for the pipe-laying of the water utility’s main line from tip-off point in Barangay Lumbia to Carmen reservoir and Puli interconnection from 2003 to 2007, supposedly worth P5 million but was bloated to P21 million, the COA report noted.
This paper tried to get Rio Verde’s and Geo-Transport’s side for this story but failed.
Meanwhile, COWD has announced its water rate increase effective November 1 this year. The government-run water facility is raising the water rates at 30 percent but it will implement the increase in an installment basis. The 10 percent increase will be collected beginning November this year and the remaining 20 percent will be implemented in 2014.
Published in the Sun.Star Cagayan de Oro newspaper on September 18, 2013.